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Market Review - 25/08/2008 21:50 GMTU.S. dollar fell against yen and Swiss franc on risk aversion
The greenback dropped against the Japanese yen and Swiss franc on
Monday due to tumbling U.S. equity markets as nagging credit worries
prompted investors to trim risky trades. However, the dollar gained
versus the euro and at one point rose to a two-year high against the
British pound, backed by a predominant view that declining growth in
the eurozone and Britain could force their central banks to cut
benchmark interest rates.
U.S. stock markets fell sharply on Monday, led by financial shares. The Dow Jones Industrial Average Index tumbled 241 points or 2.08%, caused
by a steep fall in Lehman Brothers and was last trading at 11,386. Although the dollar rebounded on better-than-expected U.S. existing home sales in July (5.0 million versus forecast of 4.9 million), worries in the U.S. financial sector spooked currency investors and fueled a selloff in the dollar against the Japanese yen and Swiss franc and the U.S. currency dropped to session lows of 109.02 and 1.0923 respectively before recovering and ended at 109.30 and 1.0959 at New York closing. The yen also firmed against the euro due to unwinding of carry trades, which fell 0.9 percent to 161.28 yen. However, the dollar index on the ICE Futures Exchange, which measures the unit's value versus a basket of six currencies, was little changed on Monday and was last trading at 76.804.
Earlier in the day, euro and British pound fell against the dollar on sluggish growth outlook on those economies, which could imply their central bank to cut rates later in next meeting. The single currency dropped to a multi-month low of 1.4696 while cable fell to a two-year low and touched 1.8405 before recovering on dollar’s renewed weakness. These two currencies were trading at 1.4754 and 1.8532 respectively at New York closing.
South Korea's won dropped as much as 1.6 percent to 1,079.9 versus the dollar, the weakest level since November 2004, as a top South Korean regulator voiced concerns about state-run Korea Development Bank's interest in buying a global bank (KDB on Friday had named Lehman as one of its options for an overseas acquisition).
On Tuesday, economic data releases includes New Zealand trade balance, Japan CSPI, German GDP, Gfk index and Ifo index, U.S. consumer confidence, new home sales and house price index.
Market Review - 25/08/2008 21:50 GMT
U.S. dollar fell against yen and Swiss franc on risk aversion
The greenback dropped against the Japanese yen and Swiss franc on
Monday due to tumbling U.S. equity markets as nagging credit worries
prompted investors to trim risky trades. However, the dollar gained
versus the euro and at one point rose to a two-year high against the
British pound, backed by a predominant view that declining growth in
the eurozone and Britain could force their central banks to cut
benchmark interest rates. U.S. stock markets fell sharply on Monday, led by financial shares. The Dow Jones Industrial Average Index tumbled 241 points or 2.08%, caused
by a steep fall in Lehman Brothers and was last trading at 11,386. Although the dollar rebounded on better-than-expected U.S. existing home sales in July (5.0 million versus forecast of 4.9 million), worries in the U.S. financial sector spooked currency investors and fueled a selloff in the dollar against the Japanese yen and Swiss franc and the U.S. currency dropped to session lows of 109.02 and 1.0923 respectively before recovering and ended at 109.30 and 1.0959 at New York closing. The yen also firmed against the euro due to unwinding of carry trades, which fell 0.9 percent to 161.28 yen. However, the dollar index on the ICE Futures Exchange, which measures the unit's value versus a basket of six currencies, was little changed on Monday and was last trading at 76.804.
Earlier in the day, euro and British pound fell against the dollar on sluggish growth outlook on those economies, which could imply their central bank to cut rates later in next meeting. The single currency dropped to a multi-month low of 1.4696 while cable fell to a two-year low and touched 1.8405 before recovering on dollar’s renewed weakness. These two currencies were trading at 1.4754 and 1.8532 respectively at New York closing.
South Korea's won dropped as much as 1.6 percent to 1,079.9 versus the dollar, the weakest level since November 2004, as a top South Korean regulator voiced concerns about state-run Korea Development Bank's interest in buying a global bank (KDB on Friday had named Lehman as one of its options for an overseas acquisition).
On Tuesday, economic data releases includes New Zealand trade balance, Japan CSPI, German GDP, Gfk index and Ifo index, U.S. consumer confidence, new home sales and house price index.
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